On Monday morning, President Joe Biden claimed his administration’s swift actions had avoided potential turmoil in the banking system.
“The deposits of bank customers across the country is secure,” Biden said. “Small businesses can relax knowing their wages and bills will be taken care of. Their employees can now take a sigh of relief.”
President Joe Biden did not address how his policies have led to surging inflation and rising interest rates, instead placing the blame on the previous administration.
“When we were in office, my administration put in tough regulations on banks like SVB and Signature Bank, following the Dodd-Frank law, so that what happened in 2008 wouldn’t happen again,” he said. “Unfortunately, these guidelines were rolled back during the previous administration.”
The FDIC announced earlier this week that SVB had shut down due to heavy losses from liquidating a bond portfolio worth $21 billion. This news led to many investors and startups who work with the company being concerned about their assets. SVB is the largest bank in California’s Silicon Valley and provides services to almost half of venture-backed technology and healthcare companies.
On Sunday, Janet Yellen, Jerome H. Powell and Martin J. Gruenberg — all cabinet members of the Treasury Department, Federal Reserve Board and FDIC respectively — released a statement confirming that a second bank in New York had been closed by state officials.
“We can confirm that Signature Bank, New York, New York has been shut down today by its state chartering authority,” they said. “No taxpayer money will have to be used to reimburse any depositors as was the case with Silicon Valley Bank.”